Tag: lawsuit

Lawsuit Challenges CFPB’s ‘Buy Now, Pay Later’ Rule

On Oct. 18, 2024, fintech trade group Financial Technology Association (FTA) filed a lawsuit challenging the Consumer Financial Protection Bureau’s (CFPB) final interpretative rule on “Buy Now, Pay Later” (BNPL) products. Released in May 2024, the CFPB’s interpretative rule classifies BNPL products as “credit cards” and their providers as “card issuers” and “creditors” for purposes of the Truth in Lending Act (TILA) and Regulation Z.

The FTA filed its lawsuit challenging the CFPB’s interpretative rule in the U.S. District Court for the District of Columbia. The FTA alleges that the CFPB violated the Administrative Procedure Act’s (APA) notice-and-comment requirements by imposing new obligations on BNPL providers under the label of an “interpretive rule.” The FTA also alleges that the CFPB violated the APA’s requirement that agencies act within their statutory authority by ignoring TILA’s effective-date requirement for new disclosure requirements and imposing obligations beyond those permitted by TILA. The FTA also contends that the CFPB’s interpretive rule is arbitrary and capricious because it is “a poor fit for BNPL products,” grants “insufficient time for BNPL providers to come into compliance with the new obligations” imposed by the rule, and neglects “the serious reliance interests that [the CFPB’s] prior policy on BNPL products engendered.”

In a press release announcing its lawsuit, the FTA said the BNPL industry would welcome regulations that fit the unique characteristics of BNPL products, but that the CFPB’s interpretive rule is a poor fit that risks creating confusion for consumers. “Unfortunately, the CFPB’s rushed interpretive rule falls short on multiple counts, oversteps legal bounds, and risks creating confusion for consumers,” FTA President and CEO Penny Lee said. “The CFPB is seeking to fundamentally change the regulatory treatment of pay-in-four BNPL products without adhering to required rulemaking procedures, in excess of its statutory authority, and in an unreasonable manner.”

The FTA’s pending lawsuit notwithstanding, BNPL providers may wish to consult with legal counsel regarding compliance with the CFPB’s interpretive rule. Retailers marketing BNPL products should also consider working with legal counsel to implement third-party vendor oversight policies to enhance BNPL-partner compliance with the rule.

©2024 Greenberg Traurig, LLP. All rights reserved.
For more on the CFPB, visit the NLR Financial Institutions Banking section.

A Guidebook to Lawsuits Over PFAS, or Forever Chemicals

Lawsuits over the effects of per and polyfluoroalkyl substances (PFAS) have become some of the most momentous legal battles since the Big Tobacco lawsuits. PFAS compounds, also known as “forever chemicals,” are used in so many different products that you are almost guaranteed to have one in your home. Since 2000, it has been discovered that these chemicals do not break down, have contaminated numerous water sources in America, that virtually everyone has been exposed to them, and that they carry serious health risks, including several types of cancer.

Already, PFAS manufacturers and other companies that use PFAS in the course of their daily business have paid over $11 billion in PFAS lawsuits, and that is just to mitigate the damage of PFAS exposure by cleaning up contaminated soils and waters. The lawsuits to compensate victims of PFAS exposure are just beginning, and may eclipse this massive total.

What are PFAS Chemicals?

PFAS chemicals are synthetic compounds that have multiple fluorine atoms attached to a chain of alkyl, which includes carbon atoms. There are thousands of different compounds that fall into the category of PFAS chemicals. Importantly, though, the fluorine-carbon bond that is present in all of them is one of the strongest in organic chemistry, with no natural processes for breaking it down. As a result, once a PFAS compound is created, it will continue to be a PFAS compound until something is done to it to break down its chemical structure, like superheating it when it is in water.

What are They Used For?

PFAS chemicals have been used by several major corporations for a variety of applications since they were first used to invent Teflon in 1938. Broadly speaking, PFAS chemicals are extremely useful at resisting, cleaning, or preventing:

  • Heat
  • Water
  • Stains
  • Grease
  • Oil

These broad applications, however, have meant that they have been used in a huge number of specific ways. For example, PFAS chemicals are included in the following products to resist water:

  • Paint
  • Clothing
  • Raincoats
  • Tents
  • Shoes
  • Personal care products, like mascara and sunscreen

As a heat resistant chemical, PFAS compounds are frequently used in:

  • Non-stick cookware
  • Electrical wire insulation
  • Firefighting foam
  • Building materials, including adhesives and insulation

As a stain resistant material, PFAS chemicals have been used in:

  • Carpeting
  • Stain-resistant clothing
  • Window curtains
  • Furniture and varnishing
  • Dental floss
  • Food packaging

PFAS chemicals have also been used as oil- and grease-resistant products, like:

  • Lubricants
  • Hydraulic fluids
  • Pizza boxes and microwave popcorn bags

The practical effect of all of this is that PFAS chemicals are everywhere. There are very few days that you do not interact with one. Worse, because the chemical structure of PFAS compounds do not break down, when they are used or discarded they can contaminate the area around them.

What Have PFAS Chemicals Contaminated?

Virtually everything.

In the early days after PFAS chemicals started to get used for a variety of consumer products, the public and the companies behind the compounds disposed of them with no regard or understanding for the dangers that they were causing.

That lack of understanding by the corporations behind PFAS chemicals, however, began to disintegrate in the 1970s. It was around then that 3M, one of the leading PFAS manufacturing companies, discovered its PFAS chemicals inside fish in local waterways.

Rather than sound the alarm, though, 3M and its competitors continued to dispose of used or unwanted PFAS materials in whatever means they wanted or were most convenient at the time. They burned them, buried them, or dumped them into the water. Some PFAS manufacturers even developed a new firefighting foam, aqueous film forming foams (AFFFs), that relied heavily on PFAS chemicals to put out fires involving airplane jet fuel. Firefighters used this PFAS containing firefighting foam on actual fires at airports and trained with it on controlled fires at airports across the country.

The PFAS chemicals in the foam leeched into the soil and waterways near these airports for decades.

The problem was not discovered, at least not by regulators from the federal government, until 1998. That was when the U.S. Environmental Protection Agency (EPA) learned of an internal study by 3M. In that study, researchers exposed pregnant rats to PFAS materials. Inevitably, the newborn rats died within a few days. Alarmed by the news, the EPA began to investigate in an effort to regulate PFAS.

It was also at this time that a cattle farmer in West Virginia lost his animals to a mysterious health condition. Suspecting that the culprit was a major chemical plant upriver that was owned by PFAS manufacturer DuPont, the farmer sued. Over the next couple of years, the PFAS litigation expanded into a class action of over 3,500 plaintiffs and multiple water districts in the West Virginia region. A temporary settlement was reached in which DuPont would provide $30 million of funding for an independent health and environmental study to address PFAS contamination in the soil and water, the C8 Science Panel.

The findings of this Panel and subsequent studies were dire: There was PFAS contamination virtually everywhere. It was in the soil. It was in the water. It was in the animals that ate plants from the soil and that drank the water. Fish from contaminated waterways had especially high levels of PFAS chemicals in them. And PFAS chemicals were in human beings.

Who Has Been Exposed to Them?

According to one study, 95 percent of Americans had a detectable amount of PFAS chemicals in their blood.

Anyone who is exposed to PFAS chemicals has a risk of ingesting it or it getting into their body some other way – PFAS chemicals are readily absorbed through the skin, and can even get inside your body through your tear ducts. The most common way for your PFAS exposure to become PFAS contamination are:

  • Eating contaminated food or drinking contaminated water
  • Touching anything with PFAS chemicals in it, including clothing and soil
  • Inhaling contaminated dust or air
  • Swallowing anything that has PFAS chemicals in it, like makeup or lipstick
  • Being in contaminated air, which can get into your body through your skin pores and sweat

This means different people are at higher risk of PFAS exposure and contamination than others.

For example, people who live in or near communities that have PFAS industries that emit the chemical into the air are likely to get exposed to the dangerous chemical every single day. Firefighters who use or train with PFAS-heavy AFFF are likely to get severe exposure to the chemical whenever they use the foam, but especially when they use it on a real fire, which burns the chemical and releases it into the air where it is more easily inhaled or absorbed through the skin.

Once they are in your body, PFAS chemicals work their way into your bloodstream. Once there, they pass through your body as your blood circulates. This takes them through all of the organs that handle your blood, including your kidneys and liver. While these organs are responsible for breaking down toxins in your blood, they cannot handle PFAS chemicals. Unless PFAS chemicals are excreted somehow, they will continue to pass through your organs, causing harm to them each time they go by.

Excreting PFAS chemicals seems to be difficult. Studies have found that many people do not excrete PFAS chemicals in their urine very well, though others can do it better. These variations in excretion mean that similar people with similar exposures to PFAS chemicals may have different levels of contamination.

Aside from urinating, the only ways to get PFAS chemicals out of your body are to bleed out contaminated blood and to breastfeed, though breastfeeding just gives the contamination to the newborn child who drinks the milk.

What Health Risks Come With PFAS Contamination?

It is important to know that there is still a lot that researchers have to learn about the health conditions caused by PFAS contamination. Collecting more data may connect new health conditions to high levels of exposure to the chemical, or may even undermine what we think we know at this point.

Right now, though, medical research has found that exposure to toxic PFAS chemicals and high levels of PFAS contamination are associated with higher risks of:

  • Liver damage and cancer
  • Kidney cancer
  • Prostate cancer
  • Testicular cancer
  • Thyroid Disease
  • Fertility problems
  • Pregnancy issues, including:
    • Fetal death
    • Low birth weight
    • Developmental delays in newborns
    • Preeclampsia
    • Hypertension
  • Obesity
  • Hormonal disruption and irregularities
  • Dysfunction in the immune system
  • High cholesterol

Some of these conditions are debilitating. Others may prove to be fatal.

Have There Been Any Settlements?

At this point, the only lawsuits that have been settled by PFAS manufacturers have been those brought by public municipalities and water districts. These class actions and multidistrict litigation (MDL) cases demanded compensation from these companies for the costs of decontaminating soil and upgrading water filtration system to eliminate PFAS from the drinking water.

Already, though, these lawsuits have recovered over $11 billion in settlements.

The first settlement is probably the most telling. This was the West Virginia case that led to the creation of the C8 Science Panel. In 2005, the Panel was created as a part of a temporary settlement that also required DuPont and its spin-off company, Chemours, to pay $71 million and cover the costs of fixing local water treatment facilities.

After the C8 Science Panel began publishing its findings, though, DuPont and Chemours reached a final settlement agreement of $671 million.

Both the settlement and the Panel’s findings led to numerous other studies, as well as to lawsuits by water districts against PFAS manufacturers.

The biggest of these has proven to be the MDL consisting of claims of over 300 water municipalities against the company 3M. This one nearly went to a bellwether trial, settling at the last moment in June, 2023, for between $10.3 billion and $12.5 billion, with the final amount depending on the amount of PFAS contamination that is found in the water. A similar lawsuit against DuPont and its subsidiaries and spin-offs settled soon thereafter for $1.185 billion. More recently, the MDL against Tyco Fire Products, one of the companies behind the firefighting foam AFFF, settled in April, 2024, for $750 million, and the one against BASF settled in May for $316.5 million.

What About Mass Tort Claims?

These massive settlements, totaling over $11 billion, are just to cover the costs of cleaning up the soil and water of the plaintiff municipalities. We have not even begun to recover compensation for the individual victims who have suffered the healthcare issues connected to PFAS exposure and contamination.

Several of these cases are ongoing, though.

Some are being pursued by small groups of plaintiffs against smaller PFAS businesses, like this Connecticut community that is suing a local paper company for contaminating local waterways with PFAS chemicals.

Many more, however, have been consolidated into an MDL in South Carolina. As of July, 2024, it had more than 9,000 claims in it. This MDL, though, is strictly concerned with PFAS exposure from AFFF firefighting foam. However, it does include individual plaintiffs who have suffered actual harm from PFAS exposure, rather than public municipalities. These individual plaintiffs are demanding compensation for their adverse health conditions, medical monitoring, and even for the costs of cleaning up contaminated private property or for the reduction in property values caused by the contamination.

According to PFAS mass tort lawyer Dr. Nick Oberheiden, founding partner of the national law firm Oberheiden P.C., “It seems safe to say that these individual claims for compensation related to PFAS exposure and contamination are going to continue to get filed for decades into the future. One likely outcome is that an MDL will form for non-AFFF specific claims related to medical conditions and property value loss due to PFAS contamination. Victims who have been exposed to PFAS chemicals could then join the MDL and benefit from the expedited process that it entails. If PFAS manufacturers and defendants go bankrupt, we will likely see a trust fund being created, similar to how asbestos manufacturers handled the thousands of cases against them.”

Oberheiden P.C. © 2024
by: Dr. Nick Oberheiden of Oberheiden P.C.
For more news on PFAS Litigation, visit the NLR Environmental, Energy, & Resources section

Be Careful What You Write: What a Heavily Redacted Antitrust Complaint Teaches Us About Creating Problematic Documents in Transactions

The Federal Trade Commission (FTC) recently filed a complaint in the U.S. District Court for the Southern District of Texas to stop Tempur Sealy’s proposed acquisition of Mattress Firm. See Federal Trade Comm’n v. Tempur Sealy Int’l, Inc. and Mattress Firm Group Inc., Case No. 4:24-cv-02508 (S.D. Tex. Jul. 2, 2024). On the same day, the FTC also commenced an administrative proceeding in its own court to block the transaction. See In re Tempur Sealy Int’l, Inc. and Mattress Firm Group Inc., Docket No. 9433 (FTC Jul. 2, 2024). According to the complaints, Tempur Sealy is the world’s largest mattress supplier and Mattress Firm is the largest mattress retailer in the United States. Vertical mergers between manufacturers and retailers can often produce procompetitive benefits, but this transaction struck the FTC as anticompetitive. The FTC’s principal concern appears to be that Tempur Sealy would shut off its rivals’ access to Mattress Firm.

Supporting the FTC’s decision to sue, Federal Trade Commissioner Melissa Holyoak said, “Despite the increased likelihood of procompetitive effects from vertical mergers, they may still result in harm in some circumstances. Consistent with these well-established economic principles, I vote in favor of filing this complaint based upon the substantial evidence generated by staff’s thorough investigation, especially the parties’ own ordinary-course documents. I have reason to believe that the effect of Tempur Sealy’s acquisition of Mattress Firm ‘may be to substantially lessen competition.’” (Emphasis added).

What exactly was in these ordinary course documents that caused Holyoak to believe this merger violates Section 7 of the Clayton Act and Section 5 of the FTC Act? The short answer is we don’t know. The complaints, which extensively quote some documents, are heavily redacted and the documents themselves, even in redacted form, are not attached to the complaints. Nor would we expect the documents to be attached, as they likely contain competitively sensitive information that ordinarily would not be on the public record. Rather than speculate about the documents themselves, let’s use the allegations in the FTC’s complaints as a tool to remind ourselves how documents are used in antitrust investigations and how lawyers and clients can work together to reduce the likelihood that potentially problematic documents are created.

  1. What’s an “ordinary course” document? As the name suggests, an ordinary course document is one that is created by the parties in the course of their ordinary business activities. It may be a routinely issued report, an email or text exchange by two employees, Slack messages, a slide deck, board minutes or any other form of written communication. Antitrust regulators routinely use these documents to gain insight into how the parties see themselves in relation to the competition, the rationale for a transaction, and how the parties view the likely competitive effects of a transaction. Often regulators will place more emphasis on communications from senior leadership in a corporation as those individuals may have greater knowledge of the transaction and have more authority to “speak” for an entity than lower-level employees. Regulators will use these documents not only to support their own theories and claims, but also to contradict the parties’ advocacy about the procompetitive aspects of a deal.
  2. How does the government obtain these ordinary course documents? In the case of the Tempur Sealy/Mattress Firm transaction and other high dollar value transactions, the parties were required to file Hart-Scott-Rodino (HSR) premerger notification forms. When an HSR filing is required, the parties must produce documents that discuss the transaction in relation to certain specific topics, such as competition, competitors, markets, and market shares. These documents are usually not ordinary course documents as they were created specifically for the deal but are nevertheless critical in the regulators’ review of potential competitive issues. Documents routinely produced in the HSR process, such as Confidential Information Memoranda (CIM) and Management Presentations, may contain statements that could create potential antitrust concerns. Clients should recognize that even the smallest of things in a CIM or Management Presentation have the potential to create big problems, as government regulators will read every page of what is submitted to them. For example, assume that an HSR filing contains a 100-page deck intended to serve as a Management Presentation, and one page of that deck contains a sentence that says: “We [seller] are the dominant player in our industry and we face minimal competition.” The rest of the deck might be completely innocuous, but depending on the circumstances, that one sentence has the potential to ignite regulators’ interest.Some transactions, such as Tempur Sealy/Mattress Firm, undergo a Second Request process after HSR is filed. A Second Request is an extensive subpoena requesting documents and data from the parties that goes far beyond the HSR process. The Second Request process is what likely turned up the “ordinary course” documents mentioned in Holyoak’s statement. This included text messages. See, e.g., Paragraph 108 of the federal complaint and Paragraph 99 of the administrative complaint. Judging from the amount of redacted material referenced in the complaints, the FTC appears to believe there are many documents that portray this transaction in an anticompetitive light.

    Clients should also be aware that the government’s authority to review and investigate transactions is not limited to only those transactions that require HSR filings; the government’s authority extends to any transaction that impacts competition in the United States. In addition to HSR filings, the government learns about deals through a variety of sources, such as press reports and third party complaints from customers or competitors. Accordingly, our views about document creation extend to all transactions, not just those requiring HSR premerger notification.

  3. Document creation in transactions is a team sport. That means lawyers and clients should work together as a team to minimize the creation of potentially harmful documents. The team should also include investment bankers and other advisors who are generating documents that analyze the transaction. In ideal circumstances, clients will involve experienced antitrust lawyers early on to understand: 1) whether the transaction potentially raises substantive antitrust concerns, such as when two direct competitors combine; 2) if the transaction will require HSR notification; and 3) whether or not HSR is required, what are the guardrails or best practices the client should observe. Recognizing that we don’t always operate in ideal circumstances and lawyers may only become involved after certain documents are created, lawyers should nevertheless remain vigilant about documents from the time they become involved in a deal. Coaching clients and their advisors about document creation best practices is always critically important.
  4. What are some best practices? Lawyers should proactively educate their clients on what to say (or not say) about the transaction and which words or phrases may be particularly susceptible to raising potential antitrust concerns. For example, words like “dominate” and “control” in relation to competition and competitors may create problems, as could market share statistics that overstate a seller’s prominence in a particular industry. Lawyers should also review drafts of documents such as CIMs, Management Presentations, and teasers to ensure that they are free of harmful verbiage.
  5. Expect statements to be misunderstood or taken out of context: Reading the Tempur Sealy/Mattress Firm complaints, two things are clear: 1) the government relied on portions of documents to support its allegations; and 2) the context of many of the quoted statements is unknown. It may be the case that some of the statements the FTC found important become less important when the entire document is reviewed and the context of the statement is made clear. Relatedly, there may be other documents not referenced in the complaints that indicate the transaction has procompetitive benefits. Allegations in a complaint are just that – allegations – and the evidence that emerges as the case progresses may or may not support those allegations. That being said, parties are wise to follow the best practices above. Similarly, they are also wise to avoid making exaggerated statements or statements intended to be humorous. These statements may be misunderstood by government regulators who do not know the specific industry or its players as well as clients do.
  6. Follow the general principle of “less is more” when it comes to document creation. Many transactions seem to move at lightning speed, but a moment of self-reflection can be very valuable. Ask yourself: do I need to write this, and if I do, what’s the best way to say it? Some organizations are more document-intensive than others, and there may be other reasons, unrelated to antitrust considerations, that require certain documentation. But in general, more documents are probably created than are truly necessary and more documents create the potential for more problems. Regardless, the key is to remember emails, texts, Slack messages, and slide decks may be read not only by their intended recipients but also by government antitrust regulators.
Copyright ©2024 Nelson Mullins Riley & Scarborough LLP
For more news on Antitrust Complaints, visit the NLR Antitrust Trade & Regulation section.

Ozempic Lawsuit Overview

Makers of Ozempic and other semaglutide drugs are facing hundreds of lawsuits throughout the United States. While intended for diabetes management and weight loss, research has linked the drug to increased risk of gastroparesis, stomach paralysis, pancreatitis and bowel obstruction.

Plaintiffs and their Ozempic lawsuit lawyers are seeking monetary compensation through products liability litigation. Victims are continuing to come forward. As of June 2024, cases are in preliminary stages, with new cases being added to multi-district litigation.

What Is the Ozempic Lawsuit About?

The Ozempic lawsuit is about whether the manufacturers of semaglutide drugs created and sold an unreasonably dangerous drug that hurt people. Plaintiffs say that the drugs created an unreasonable risk of gastrointestinal injury – a risk that the drug manufacturers knew about, and that they hid from the public.

What drugs are involved in the Ozempic weight loss lawsuit?

Ozempic might be the best known of the drugs involved in the weight loss lawsuits, but there are several drugs named in litigation. These drugs include:

● Ozempic
● Wegovy
● Rybelsus
● Trulicity
● Mounjaro

Ozempic, Wegovy and Rybelsus are manufactured by Danish pharmaceutical giant Novo Nordisk. Trulicity and Mounjaro are manufactured by Eli Lilly and Company.

Each individual case names the drug or drugs that the plaintiff took.

What are the issues in the Ozempic lawsuit?

There are three primary issues alleged in the Ozempic lawsuits:

1. Whether the drug companies knew or should have known that their semaglutide drugs could cause gastroparesis and other gastrointestinal issues.

2. Whether the drug companies adequately warned doctors and patients about the dangers of their products.

3. Whether the drug companies made false, misleading, or incomplete statements about safety as they marketed their products.

Overview of the Drug of Ozempic and How It Works

Danish pharmaceutical company Novo Nordisk developed the diabetes drug Ozempic. Its purpose is to treat type 2 diabetes.

How do Ozempic and related weight loss drugs work?

Ozempic is a glucagon-like peptide-1 (GLP-1) receptor agonist. The drug signals the body that it is not hungry and to stop eating. It is meant to act like the GLP-1 hormone.

When we eat, the body releases the GLP-1 hormone in the intestinal tract. The hormone signals the brain that it is full. When the hormone is present, a person may eat less or stop eating. In diabetes patients, the drugs trigger insulin production and reduce a hormone from the pancreas that increases blood sugar. The drug helps keep the person’s blood sugar level lower, managing their diabetes.

Over time, Novo Nordisk made and marketed three different semaglutide GLP-1 receptor agonist drugs:

● Ozempic – Injected with a pen, approved in 2017
● Rybelsus – Taken by pill, approved in 2019
● Wegovy – Targeted for weight loss patients, in a higher concentration than other forms of semaglutides, approved in 2021

With FDA approval, sales of these weight loss drugs soared. Medicare even began to cover the drug Wegovy in 2024, with some restrictions. There was such a demand for the products that there was a shortage in 2023.

Not a miracle drug after all

At first, manufacturers thought that they had created a miracle drug. The New England Journal of Medicine reported that people taking semaglutide drugs lost up to 15% of their body weight. Novo Nordisk aggressively marketed the drugs, including with consumer-direct marketing campaigns. Influencers on social media touted the benefits, and there were stories of celebrities who had found seemingly effortless success.

However, it soon became clear that there may be serious problems with the drugs. Doctors and researchers began learning that the drugs may cause higher rates of gastroparesis and other gastrointestinal issues. Victims say that when these drugs were marketed to them, they were unaware that they were placing themselves in serious danger.

What’s the problem with Ozempic?

Ozempic and other weight loss drugs may cause higher rates of gastroparesis. Gastroparesis is a medical condition of weakened stomach muscles and intestines. The condition can lead to other problems and complications because the person cannot move food through the body in a
timely manner.

What is gastroparesis?

Gastroparesis is delayed gastric emptying of the digestive tract, including the stomach, intestines and bowels. The person has weakened muscles in their stomach and intestines, so they’re not able to digest food at a reasonable pace. The condition can cause several problems
and complications, including:

● Stomach pain
● Vomiting, nausea, diarrhea
● Fatigue
● Vitamin, nutrition deficiencies
● Bloating
● Too many bacteria in the small intestine
● Obstructed intestine or bowel

Gastroparesis can cause discomfort. The condition can be dangerous and life-threatening. Diabetes can mask the symptoms of gastroparesis, making it harder to detect.

Ozempic Lawsuit Case Details

What type of case is the Ozempic lawsuit?

The Ozempic stomach paralysis lawsuit is a tort product liability case, which is not an Ozempic class action lawsuit. The claims have been consolidated into multidistrict litigation. People who were harmed by taking the drug are bringing civil claims, seeking compensation for their monetary damages, physical harm and suffering.

What is the Ozempic lawsuit case number?

The Ozempic gastrointestinal lawsuits are currently joined in Multi-District Litigation In Re: Glucagon-Like Peptide – 1 Receptor Agonists (GLP-1 RAS) Products Liability Litigation, MDL-3094. The cases are joined in the United States District Court for the Eastern District of Pennsylvania. Each individual case that is part of the multi-district litigation proceeds retains its
own individual case number.

Note: Ozempic is also the subject of unrelated multi-district litigation regarding patents (MDL-3038). The cases have been consolidated in a Delaware court. The issues are unrelated to the issues in the defective drug products liability cases.

Who is the judge of the Ozempic multi-district litigation?

District Judge Gene E.K. Pratter was assigned to preside over the Ozempic multidistrict litigation. However, she passed away in May 2024. A new judge will be assigned to the case.

How many cases are a part of the Ozempic lawsuit?

As of June 2024, there are 101 cases pending in the Ozempic lawsuit multi-district litigation. New cases are being added periodically as victims come forward.

Multi-District Litigation – Cases Joined Together for Preliminary Proceedings

The Ozempic lawsuit started as separate lawsuits filed throughout the United States. At first, 18 cases were filed in 11 judicial districts. There were another 37 related cases in 15 districts.

Nine of the original plaintiffs believed that it would make more sense to build their cases together. They thought their cases were similar enough that they should work together for preliminary proceedings. They wanted to work together in discovery, preliminary motions, depositions and evidentiary rulings. On December 1, 2023, they filed a motion to transfer the cases from their respective courts.

On February 5, 2024, the courts agreed and ordered the cases combined for preliminary proceedings in multi-district litigation.

Not everyone wanted the transfer. Some plaintiffs thought that only claims against Novo Nordisk should be combined. The parties opposing MDL didn’t want multiple defendants combined.

However, the court transferred all claims involving similar allegations about GLP-1 RA drugs and whether they cause gastrointestinal issues. The court said that even though the two companies sold drugs with different molecular structures, complete overlap of issues is not required.

Current Status of the Ozempic Weight Loss Litigation

The Ozempic weight loss litigation is in the early stages. As of June 9, 2024, the court has issued four case management orders. These orders direct the parties to do certain things in preliminary proceedings.

Case management order no. 1 – February 15, 2024

● A statement that cases transferred to the court, and cases subsequently transferred to the court, will be subject to the court’s orders.
● Attorneys are directed to review the court’s policies and procedures.
● The court set the date, time and place for the first in-court case conference. The court set aside two hours of court time for the conference.
● Topics to be discussed included selecting plaintiff’s lead counsel, the responsibilities of lead counsel and allocation of tasks. The court said that pleadings, timing, future status conferences and other issues could be discussed.

Case management order no. 2 – February 16, 2024

● Waiving pro hac vice fees in the case.
● Requiring parties to submit the court’s pro hac vice form, if applicable.

Case management order no. 3 – April 23, 2024

● Appointing Liaison Counsel for Plaintiffs, and a mentor.
● Identifying and appointing counsel to the Plaintiff’s Committee.
● Authorizing Committee members to select additional counsel for the Committee, up to 25 total members.
● Allowing the Committee to create subcommittees.
● Ordering the Committee to propose conference dates.

Case management order no. 4 – April 24, 2024

● Requiring the parties to preserve potentially relevant evidence.
● Parties must keep documents, data and tangible things in their presence that are relevant to the claims and defenses in the case.
● Each party must take reasonable steps to avoid loss of the evidence. Auto-delete features must be disabled.
● Certain sources don’t need to be preserved, searched or produced from.
● Keeping evidence or information is not an agreement or concession that the material is relevant to litigation.

There have been other filings in the case. These filings are procedural, like asking the court for additional time to respond to the motion to transfer the cases to multi-district litigation and required proof of service documents.

The court held a status conference on March 14, 2024. Preliminary proceedings will continue, after which the court may schedule bellwether trials. These early trials inform the parties as to how cases may be decided if they go to trial.

Basis of a Claim

The decisions that people make about their medical care may impact the rest of their lives. The choices that people make about their healthcare should be informed.

A critical basis for the Ozempic lawsuit is the claim that the drug manufacturer failed to warn consumers about the risks of the drugs. Some claims allege that the warning label was too generic, listing minor symptoms but saying too little about gastrointestinal issues, and not
emphasizing the dangers enough.

Many patients saw the direct-to-consumer marketing campaigns, including $180.2 million spent to market the drug in 2022. Marketing efforts for Rybelsus were similarly robust in 2022, at $167.2 million spent. Much of the marketing budget was spent on national television ads.

The marketing worked, and sales climbed high that year. Novo Nordisk credited the marketing effort for its 36% revenue growth in North America in 2022.

Consumers say that with marketing efforts this strong, they had the right to complete information before taking Ozempic or another semaglutide drug.

U.S. products liability law and the Ozempic case

In the United States, drug manufacturers have a legal liability to make products that are reasonably safe. Product liability is the type of case that a victim may bring if they are harmed by a dangerous drug. One of the ways that a drug can be dangerous is if the public doesn’t have the information that they need about the risks and potential harm.

A claim may also be based on misleading statements in advertising. The lawsuits say that the drug manufacturer proclaimed the benefits of the drugs without emphasizing the potential risks. Plaintiffs say that the advertising campaigns were deficient enough that the drug companies
should be liable for damages.

Damages for Ozempic Lawsuit

The purpose of the Ozempic lawsuit is to compensate victims. A person who develops gastroparesis likely has significant losses due to medical expenses. They may have physical suffering.

Damages claimed may include economic and non-economic losses. Valuing damages is an important part of any case.

Proving an Ozempic Legal Claim

While you can file an Ozempic lawsuit, to succeed in an Ozempic lawsuit, a person must prove:

● They took Ozempic or a related drug.
● The drug was defective under legal standards.
● Because of taking the drug, the victim developed medical problems. There is causation between using the drug and the harm that occurred.
● Damages resulted to the victim including medical bills, other financial losses, physical pain, suffering and other damages.

Novo Nordisk is aggressively fighting claims. They have responded to the allegations and will be fighting the claims in the months to come. The parties will continue to discuss medical evidence and pursue their respective positions.

Justice for Ozempic Victims

Ozempic lawsuits are still in the early stages. New plaintiffs are continuing to join, and the cases are moving through preliminary proceedings. The court will schedule future dates as the parties develop their cases, pursue settlement and prepare for trial.

Oberheiden P.C. © 2024
For more news on Ozempic Lawsuits, visit the NLR Products Liability section.

A Tribute to Whistleblowers: Bitcoin Billionaire to pay $40 Million to Settle Tax Evasion Suit

Michael Saylor, the billionaire bitcoin investor, will pay a record $40 million to settle allegations that he defrauded Washington D.C. by falsely claiming he lived elsewhere to avoid paying D.C. taxes. The suit – discussed in of one of our previous blogs – was originally brought by a whistleblower, Tributum, LLC., and the D.C. Attorney General intervened in the lawsuit in 2022. The settlement marks the largest income tax fraud recovery in Washington D.C. history.

Though Saylor claims he has lived in Florida since 2012, the suit alleged that Saylor actually resided in a 7,000-square-foot penthouse, or on yachts docked on the Potomac River in the District of Columbia. Furthermore, the Attorney General alleged that from 2005 through 2021, Saylor paid no income taxes. Saylor first improperly claimed residency in Virginia to pay lower taxes, then created an elaborate scheme to feign Florida residency to avoid income taxes altogether, as Florida has no personal income tax. Court filings state that MicroStrategy, Saylor’s company, submitted falsified documents to prove his residency.

According to a court filing, MicroStrategy kept track of Saylor’s location, and those records show that he met the 183-day residency threshold for D.C., meaning he was obligated to pay income taxes to the District. As we mentioned in our previous blog on the case, the complaint summarizes this tax fraud scheme as “depriv[ing] the District of tens of millions of dollars or more in tax revenue it was lawfully owed, all while Saylor continued to enjoy the full range of services, infrastructure, and other fruits of living in the District.” Despite this, he allegedly made bold claims to his friends, “contending that anyone who paid taxes to the District was stupid,” according to the Attorney General.

About the case, the D.C. Attorney General further stated that “No one in the District of Columbia, no matter how wealthy or powerful they may be, is above the law.” Holding even evasive billionaires accountable is an important part of keeping the integrity of our systems intact and ensuring that we all pay our fair share. Under the District of Columbia False Claims Act , private citizens can report tax evasion schemes , while the federal False Claims Act has a “tax bar,” so tax fraud is not actionable under that law. The IRS Whistleblower program instead offers recourse.

In addition to the $40 million settlement, Saylor has agreed to comply with D.C. tax laws. The amount of the whistleblower award in the case is still being determined, but whistleblowers are entitled to 15-25% of the government’s recovery in a qui tam False Claims Act settlement.

© 2024 by Tycko & Zavareei LLP
For more news on Cryptocurrency Tax Evasion Settlements, visit the NLR Criminal Law & Business Crimes section.

Whistleblower Tax Fraud Lawsuit Against Bitcoin Billionaire Settles for $40 Million

MicroStrategy’s founder is alleged to have falsified tax documents for ten years. The settlement resolves the first whistleblower lawsuit filed under 2021 amendments to the DC False Claims Act.

Key Takeaways
On June 3, the District of Columbia Office of the Attorney General announced the $40 million settlement with Michael Saylor
It is the largest income tax recovery in D.C. history
The settlement, which resolves a qui tam lawsuit filed under the DC False Claims Act, underscores the power of whistleblowers in combatting tax fraud
On June 3, the District of Columbia Office of the Attorney General (OAG) made a landmark announcement. The billionaire founder of MicroStrategy Incorporated, Michael Saylor, settled a tax fraud lawsuit for a staggering $40 million. This case, stemming from a qui tam whistleblower suit filed under the District’s False Claims Act, marks a significant milestone in the fight against tax fraud. The OAG declared this as the largest income tax recovery in D.C. history, underscoring the importance of this case.

The DC False Claims Act
This settlement is not just a victory for the District but also a testament to the power of whistleblowers. Under the 2021 extension of the D.C. False Claims Act, individuals have the power to file qui tam suits against large companies and suspected tax evaders. The 2021 amendments even offer monetary awards to those who report tax cheats. This settlement, the first settlement under these amendments, serves to put would-be tax cheats on notice.

As the District of Columbia expands its arsenal against tax fraud, other states should take note. The DC False Claims Act, now covering tax fraud, has become a powerful tool in the fight against financial misconduct. With the District joining the ranks of Delaware, Florida, Illinois, Indiana, Nevada, New York, and Rhode Island as states where false claims suits may be brought based on tax fraud claims, the fight against tax cheats looks promising.

The Case Against Saylor
In 2021, unnamed whistleblowers filed a lawsuit against Saylor, alleging that he had defrauded the District and failed to pay income taxes from 2014 to 2020. The OAG independently investigated these claims and filed a separate complaint against Saylor. The District’s lawsuit alleged that Saylor claimed to be a resident of Florida and Virginia to avoid paying over $25 million in income taxes. Another suit was filed against MicroStrategy, claiming it falsified records and statements that facilitated Saylor’s tax avoidance scheme.

The District’s allegations against Saylor paint a picture of a lavish lifestyle. Saylor is accused of unlawfully withholding tens of millions in tax revenue by claiming to live in a lower tax jurisdiction to avoid paying D.C. income taxes. The OAG’s investigation revealed that Saylor owned a 7,000-square-foot luxury penthouse overlooking the Potomac Waterfront and docked multiple yachts in the Washington Harbor. He purchased three luxury condominium units at 3030 K Street NW to combine into his current residence and a penthouse unit at the Eden Condominiums, 2360 Champlain St. NW. The Attorney General compiled several posts from Saylor’s Facebook, in which he boasted about the view from his D.C. residence.

Whistleblower Tax Fraud Lawsuit Against Bitcoin Billionaire Settles For $40 Million

Furthermore, the OAG found evidence that Saylor purchased a house in Miami Beach, obtained a Florida driver’s license, registered to vote in Florida, and falsely listed his residence on MicroStrategy W-2 forms. Attorney General Brian L. Schwalb stated, “Saylor openly bragged about his tax-evasion scheme, encouraging his friends to follow his example and contending that anyone who paid taxes to the District was stupid.”

The lawsuits allege that records from Saylor’s security detail provide Saylor’s physical location and travel from 2015 to 2020 and show that across six years, Saylor spent 449 days in Florida and 1,397 days in the District. Saylor allegedly directed MicroStrategy employees to aid his scheme to avoid paying District income taxes. The District claims that for the last ten years, MicroStrategy has falsely reported its income tax exemption on Saylor’s wages, claiming he was tax-exempt due to his residential status.

Saylor agreed to pay the District $40 million to resolve the allegations against him and MicroStrategy.

A copy of the settlement can be found here.

Copyright Kohn, Kohn & Colapinto, LLP 2024. All Rights Reserved.

by: Whistleblower Law at Kohn Kohn Colapinto of Kohn, Kohn & Colapinto

For more on Whistleblowers, visit the NLR Criminal Law / Business Crimes section.

U.S. Supreme Court: Forced Transfers of Employees Without Loss of Pay or Rank Violate Title VII

Federal law prohibits employers from relying on certain protected statuses (race, color, religion, sex, or national origin) when making employment decisions. Lower courts have required employees suing employers to point to a materially adverse harm caused by the alleged employer discrimination. But is a forced transfer of an employee to another department—with no loss of pay or rank—an “adverse employment” decision? On April 17, 2024, the U.S. Supreme Court ruled 9-0 in the affirmative.

In Muldrow v. City of St. Louis, a female police sergeant alleged she was transferred from one job to another because she is a woman, in violation of Title VII. While her rank and pay remained the same in the new position, her responsibilities (moving from being a plainclothes intelligence officer to a more administrative role), perks (e.g., no longer having a take-home car), and schedule (fewer weekends off) did not. The District Court reiterated Title VII’s prohibition against basing employment decisions on a person’s gender, but further opined that because the female police sergeant did not demonstrate there was a “significant” change in working conditions producing “material employment disadvantage,” her discrimination claim failed as a matter of law. The District Court reached this conclusion because she suffered no “change in salary or rank,” and therefore, there was no harm and no foul. The U.S. Court of Appeals for the Eighth Circuit agreed, concluding that the plaintiff did not have a viable employment discrimination claim because her job transfer “did not result in a diminution to her title, salary, or benefits.”

Writing for a unanimous court, Justice Elena Kagan reversed the Eighth Circuit, ruling that an employee need not show “significant, serious” or “material” change in employment conditions to maintain a discrimination claim “because the text of Title VII imposes no such requirement.” More specifically, the Supreme Court reasoned that there is nothing in Title VII that distinguishes “between transfers causing significant disadvantages and transfers causing not-so-significant ones.” All a plaintiff need show in a forced discriminatory transfer case is that the transfer left the employee “worse off,” but not “significantly worse” as numerous federal appellate decisions have previously held.

© 2024 Miller, Canfield, Paddock and Stone PLC
For more news on Supreme Court Rulings, visit the NLR Litigation / Trial Practice section.

The Hidden Dangers: Long-Term Effects of Mild Traumatic Brain Injury

Traumatic brain injuries can have life-changing impacts on a person’s life, and understandably so because they result from injuries to the brain either through a massive blow to the head or injury by a penetrative object into the brain matter.

However, not all types of traumatic brain injuries have quite dramatic symptoms, and a mild TBI (traumatic brain injury) is one such injury. They result from a relatively minor blow to the head or a jerking of the head, causing injuries to the brain tissue.

While most mild TBIs resolve in a few weeks, some can affect the victim’s life in the long term.

Symptoms of a Mild TBI

If you have suffered a blow to the head in an accident, you need to pay attention to your symptoms, as it can help you identify signs of a mild TBI, also known as a concussion. Symptoms like passing out briefly, headache, memory loss, confusion, loss of balance, sensitivity to light and noise, problems keeping balance, tingling in your fingers, etc., are indicative of a concussion.

However, other injuries can present similar symptoms, so it is best to have a doctor make that determination. Also, it is important to note that concussions can go undetected for days because they tend to have delayed symptoms.

Unfortunately, taking too much time before seeking medical attention for a mild TBI can introduce treatment gaps, which can result in complications when seeking compensation for the long-term effects of a concussion. A timely hospital visit helps create a link between an accident and symptoms that could show days after the accident. Which is why personal injury lawyers always insist on seeking medical attention even when you feel okay.

Long-Term Effects of a Mild TBI

While most effects of a concussion will be gone after 90 days of suffering an accident, and this is for cases of severe injuries, there are situations where the effects of an injury can last years or a lifetime. Common long-term effects of a mild TBI on a person’s life include:

LONG-TERM MEMORY LOSS

Memory loss is pretty common after a concussion. However, it involves losing a recollection of the few minutes before and after an injury.

In some cases, the affected person can start remembering things once forgotten. However, in severe cases, memory loss can impact a person’s life in the long term.

DEPRESSION

Many people will develop symptoms of depression after a concussion, usually as a result of chemical changes resulting from the brain injury. While most symptoms will disappear as the brain recovers, some people may have to live with the symptoms for an extended period.

In some cases, symptoms of depression won’t show until some time after other symptoms are gone.

COGNITIVE IMPAIRMENT

In most cases, the effect of a mild TBI on a person’s thinking and cognitive abilities resolves in a few months at most.

But there is no guarantee that your cognitive abilities will return to your pre-injury levels, especially with relatively severe concussions or injuries that went undetected for a long time.

Treatment and Support for Mild TBI

You may not need hospitalization after a TBI. Often, doctors focus on treating the symptoms and may prescribe cognitive and behavioral therapy to address the psychological and injury effects on a person’s mental well-being.

If the injuries resulted from an accident and another person’s negligence was to blame, you could consider talking to a personal injury lawyer to help recover damages.

Buckfire & Buckfire, P.C. 2024
For more news on Traumatic Injuries, visit the NLR Personal Injury section.

Ninth Circuit Rules Against Apache in Dispute Over Sacred “Oak Flat” Site

On March 1, the U.S. Court of Appeals for the Ninth Circuit sided with a lower court decision denying an Apache interest group’s motion for a preliminary injunction against the transfer of copper-rich federal land to private company Resolution Copper.

Oak Flat, a piece of land that the Ninth Circuit acknowledges is “a site of great spiritual value to the Western Apache Indians,” has been at the center of the dispute largely due to the significant copper ore deposits it sits on. Through the Land Transfer Act, Congress directed the federal government to transfer the land to Resolution Copper, which would then mine the ore. Apache Stronghold sued the government, seeking an injunction against the land transfer on the ground that the transfer would violate its members’ rights under the Free Exercise Clause of the First Amendment, the Religious Freedom Restoration Act (“RFRA”), and an 1852 treaty between the United States and the Apaches. The Ninth Circuit disagreed, holding that Apache Stronghold was unlikely to succeed on the merits on any of its three claims before the court.

First, the Ninth Circuit found that under the Supreme Court’s controlling decision in Lyng. There, the Supreme Court held that while the government’s actions with respect to “publicly owned land” would “interfere significantly with private persons’ ability to pursue spiritual fulfillment according to their religious beliefs,” it would also have no “tendency to coerce” them “into acting contrary to their religious beliefs.” The Ninth Circuit also found that the transfer of Oak Flat for mining operations did not discriminate against nor penalize Apache Stronghold’s members, nor deny them an “equal share of the rights, benefits, and privileges enjoyed by other citizens.”

Second, Apache Stronghold’s claim that the transfer of Oak Flat to Resolution Copper would violate RFRA failed for the same reasons because “what counts as ‘substantially burden[ing] a person’s exercise of religion’ must be understood as subsuming, rather than abrogating, the holding of Lyng.”

Finally, the court ruled that Apache Stronghold’s claim that the transfer of Oak Flat would violate an enforceable trust obligation created by the 1852 Treaty of Sante Fe because the government’s statutory obligation to transfer Oak Flat abrogated any treaty obligation.

The case demonstrates the difficulty Tribes have in stopping major development projects on federal land on religious grounds.

© 2024 Van Ness Feldman LLP
For more news on Tribal Litigation, visit the NLR Tribal Law / Indigenous Peoples section.

PFAS MDL Settlements: Red Herrings For Downstream Companies

Leading up to the aqueous film-forming foam (AFFF) MDL litigation bellwether trial in June 2023, questions circulated regularly about the end game for the water utilities that had filed lawsuits alleging PFAS contamination to drinking water. With several hundred utilities with pending lawsuits seeking the costs for technology needed to filter PFAS from drinking water, monitoring wells, testing equipment, disposal costs, etc., and potentially thousands of other water utilities with similar potential lawsuits, the damages seemed astronomical. So, too, did the amount of time it would take to litigate each case to get the water utilities monetary relief. These two competing forces, plus the pressure of an actual trial date looming, led Dupont and 3M to announce PFAS MDL settlements in June 2023. At $1.185 billion by Dupont and between $10.3 billion and $12.5 billion by 3M, with the intention of both settlement funds to resolve all pending and potential water utility claims in the United States, it seemed to many that a resolution had been achieved that would address PFAS in drinking water systems without burdening utility customers or the utilities themselves.

The issue, though, is that over 9,000 water utilities were estimated to be in need of treatment technology to meet the EPA’s newly proposed drinking water standards. The American Water Works Association (AMWA) reminded everyone that their own estimates of the costs of compliance to the EPA’s level would cost utilities over $3.2 billion annually. Even buying into the old joke that lawyers are horrible at math, it does not take long for one to realize the significant gap in the proposed settlement amounts and AMWA’s estimates. Water utilities accepting money under the Dupont and 3M settlement funds are not all going to receive 100% of the necessary funding for remediation. How then will this deficit be resolved?

Water utilities will be reluctant to pass on all of the costs to customers, although pricing increases could provide a stopgap measure for water utilities on top of the MDL settlement funds. State or even federal funding may be available under grant, loan or other programs that can also assist. However, when the dust settles, it is likely that water utilities are going to look to a particular group of parties to pursue damages from – companies that discharged PFAS into waterways that fed into the water utility facilities. Lawsuits already abound nationally filed by private citizens against such companies for property damage, bodily injury and medical monitoring. Why then would water utilities finding themselves in need of significant money to properly treat drinking water not take similar legal action? Couple this with pressure water utilities are starting to receive in the form of finding themselves sued in class action lawsuits by private citizens, and the legal notion of contribution begins to ring very true for water utilities looking to minimize their own damages in such lawsuits and find sources of funding for remediation technology.

Companies that have historically discharged effluent into waterways that feed drinking water supplies must therefore keep all of the above in mind and not be lulled into a false sense of complacency that the Dupont and 3M settlements in the MDL are going to mean the end of PFAS drinking water litigation. I predict quite the opposite.

It is of the utmost importance that businesses along the whole commerce chain that have or believe that they might have used PFAS in certain processes take steps now to understand their PFAS risk. Public health and environmental groups urge legislators to regulate PFAS at an ever-increasing pace. Similarly, state level EPA enforcement action is increasing at a several-fold rate every year. Companies that did not manufacture PFAS, but merely utilized PFAS in their manufacturing processes, are becoming targets of costly enforcement actions at rates that continue to multiply year over year. Lawsuits are also filed monthly by citizens or municipalities against companies that are increasingly not PFAS chemical manufacturers. The only way to manage future risk is to fully understand what that risk picture looks like, and companies would be well-advised to invest in proper diligence for the PFAS risk question.

©2024 CMBG3 Law, LLC. All rights reserved.
For more on PFAS, visit the NLR Environmental, Energy & Resources section.